Price Will Rise in Domestic TC Market, Predictive Analytics of TC Price
In the new situation that the slow development period of economy, travail period of structural adjustment and digestion period of prophase policy appear at the same time , pesticide industry will face many problems. Such as the tough situation of external trade, external trade sell back internal trade and keen competition of internal trade. With the rapid development for several years, development rate has already slow down. From January to September,2014,the export quantity reach 47.17 million tons, decline 3.72%. Although, at the present international market is not clear, the following factors will push up TC price of domestic market.
Rigid requirement of some products increase . Herbicide such as penoxsulam、oxadiazon、oxadiargyl、Bispyribac-sodium has already enter market maturity, especially rapid growth of China and Southeast Asia improve formulation processing factories’ requirement of TC.
Capacity of some products are small, demand exceeds supply. with the appearance of new GM corps which is resistant to herbicide and the expansion of GM corps plant area, there are new chances for broad-spectrum、low-cost and convenient herbicide like 2,4-D、dicamba. However, capacity of these products can not meet demands of market. Take dicamba for example, global capacity can’t reach 50% of market demads
Under pressure of environment, many TC factories has closed or relocated, normal capacity can not release. Because lack of environment protection facilities and handling capacity, many middle and small size factories has closed or relocated. The new law of environment protection stipulate: waste water should be disposed before discharging, rejected material should be burned before handling. Which increase costs of disposing. Not long ago, propiconazole increase 1.5 million/T one-time, rise more than 10%. Price of Difeconazole rise 22%. It is predicted that price these two products will continue to rise in a short time. These are good examples.
Pressure of safety is powerful, production is insufficient. Hunan Gofar Fine Chemical Industry Tech. Co., Ltd. is a skeleton factory of carbamate TC. Since “7.19 accident”, pesticide and organic chemicals are under logistics control, so it is difficult for produce and transport. Because raw material cannot be brought in and products cannot be shipped out, Situation is tough. Annual output of former years is beyond 1.2 million tons, however this year is less than 6000 tons from January to October, decline by 40%.
Costs of logistics increase. Hunan Chifeng Agrochemical Co., Ltd. focus on producing SPM. However, from this year transportation costs of mass goods such as coal, liquid nitrogen, liquid caustic increase 5 million yuan. Especially the transportation costs of hazardous chemicals has doubled and redoubled, since late July, compared with normal period, costs has increased by 2-3times. Hunan Haili Chemical Industry Co.,Ltd. transport 1 ton productions from Changde to Shanghai, only the costs of logistics reach 2000 yuan. What’s more transportation is abnormal, which affect export of company.
Costs of human resource increase. Costs of human resource increase more quickly this year, minimum cost of rural lanor is over 120 yuan per day, increase by 20%. Some areas are short of labors, especially skilled chemical operators.
Costs of raw material increase. Because raw material factories are under pressure of environment, safety and transportation, price rises factors are passed on to downstream industry. So some raw materials increased sharply, few raw materials rise over 20%.
Financing is difficult, costs increase. Due to the government has canceled capital rationing system for dull season-stock, financing become the bottleneck for development of agrochemical companies. Some middle and small size companies reflected that costs of financing increase over 20%, private financing increase risk for survival of enterprises.
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